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History of BBVA

History of BBVA

Sex, religion, and politics, along with harmony and trust, gave birth to money. At first, there was barter. Later came coins and bills, which have now given way to the network age, a world in which space and time have disappeared and transactions are conducted in bits. In order to understand the present and predict the future, Chris Skinner reflects on the history of money in his book, ‘The Next Step: Exponential Life’, which can be downloaded online free of charge as part of BBVA’s OpenMind project.

The BBVA Historical Archive is a private business archive that traces its roots back 160 years, to the bank´s founding in 1857. Located in Bilbao, it houses the basic documentation of the three banks that would later form BBVA: Banco de Bilbao, Banco de Vizcaya and Argentaria. During the 19th and most of 20th Century, their geographical context was largely limited to Spain; it was only at the end of the 20th century that BBVA began its international expansion.

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Just as they do every summer, the streets of Paris, New York and Madrid prepare to be discovered by visitors and to enliven their imagination. Who hasn´t dreamed at one time or another of strolling through their favorite city two hundred years ago and living its history in first person? There´s no need to go on dreaming. Thanks to the BBVA Collection, we can go around the world and revisit the past.

When the deep crisis of the first half of the 1980s was over, the banking sector had undergone a process of consolidation. After restructuring, the most stable and solvent banks took over those that had not been able to survive the depression. The most important banking groups grew stronger, but had to take even more ambitious and decisive steps to meet the challenges posed by the new European landscape.

The 1973 oil crisis, which arose due to the tensions that led to the Yom Kippur War, set off a global chain reaction that also affected Spain. The increase in commodities prices, and a steady decline in Spain’s economic cycle, led to truly difficult times for the banking sector. The upward trend that had begun in the early 1960s was immediately stopped, and worrisome warning signs began to appear, such as an increase in unemployment and a fall in the value of money.

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Franco’s government pushed relentlessly to normalize the financial system after determining that most of the efforts over the last decade to open up the sector had been effective. Progressive liberalization of the system was therefore considered a path to continue following. Among other issues, the administration focused on a change in private banking in 1972.

BBVA’s expansion to the U.S. came after it found success in South America and Mexico. The U.S. was an attractive market from a demographics standpoint, with a growing population, a solid economy – which also happened to be the world’s largest – and a positive banking environment. Also, given the Group’s leadership in Latin America, the U.S. with its large and growing Hispanic population was a natural choice.

The subsequent legal reform that took place in the 1950s and early 1960s bore their fruit in the economy and in the banking sector. In the latter, the biggest banks, especially those from Vizcaya, were stronger thanks to a liberalized panorama that enabled their growth and expansion following two complicated decades in the Franco regime.

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Before long, the steps taken in the 1950s to abandon the autarchy that had trapped the Spanish economy began to produce results, prompting technocratic ministers to propose additional measures that would put Spain on the path to further liberalization. The route taken by the dictator would still require time, but during the 1960s, the economy was experiencing moments of positive change. The new legislation would encourage private banks to create specific industrial banks.

The Spanish economy was at a delicate point at the end of the 1950s. Following the civil war, Franco’s dictatorship managed to revive the economy through major intervention and the imposition of a strong autarchy that isolated Spain commercially from the western countries. The economy grew through these severe measures but indicators such as inflation began to be a concern. The time had come to change the rules of the game, at least in part.

Hand in hand with his wife Winnie, Nelson Mandela left Víctor Verster Prison as a free man for the first time in 27 years. At the gate, a police cordon held back the emotional crowd that was waiting for the South African leader and that blocked the path of the car that took Mandela to Cape Town’s Grand Parade, the square that was jammed with the hundreds of thousands of other supporters awaited him on the day of his liberation.

International Red Cross Day is celebrated each year on May 8 to commemorate the birth of the organization’s founder, Henry Dunant. After witnessing war first-hand, the Geneva businessman wrote a book that inadvertently gave rise the the largest humanitarian aid society in history.

Minister Benjamin’s Banking Law of 1946 further pulled in the already tight reins on the Spanish banking sector. In spite of everything, the two banks from Bilbao managed to grow and to distinguish themselves amongst their national competitors. Even before the greater growth that took place during the 1950s, Banco de Bilbao and Banco de Vizcaya had ended the 1940s in very good health.

Following the urgent measures adopted by Franco’s government to expedite the reconstruction of the economy, the Ministry of Finance redoubled its efforts to strengthen its grip over the banking sector.  On the last day of 1946, a new banking law was passed, outlining the new scenario in which institutions would be required to operate during the next decade.

As Franco’s government endeavored to rebuild the economy of country in shambles, companies started focusing on their own efforts to lay the foundations of their businesses in a new market, marked by much tighter government control and the impossibility of engaging in any sort of foreign commercial activity. As for banks, they faced the daunting task of putting back together the two realities into which the sector had been split during the war.

When Juan Vespucci drew the first complete image of the world, 500 years ago, he could have never imagined that his Mapa Mundi would be flying around the world from a still not very well traced location in North America. 200 artistic treasures from the most prominent collection of Spanish art outside the Iberian Peninsula have travelled from the home of the Hispanic Society of New York, to dress up the walls of the Prado Museum, from April 4th through September 10th.

After the Nationalists victory, Franco’s government had to face numerous problems. Some required a quick solution to lay the foundation for reconstruction as soon as possible. One of the issues that needed to be addressed was the existence of two currencies, the one coined by the winners and the Republican currency. This situation arose as a result of the rebel faction’s decisions made throughout the war.

On April 1, 1939, the last war report issued by Franco from Burgos concluded with a statement that read: “the war is over.” A Spain in harrowing shape needed to tackle its social and economic reconstruction process, both for its citizens, for its businesses, and, of course, for a banking industry that had seen its capabilities seriously damaged by the severity of the armed conflict. Spaniards were left facing a 40-year long dictatorship.

On top of the issues that the banking industry as a whole was struggling with as a result of Spain being split in two and the constant shifting of its borders, Banco de Bilbao and Banco de Vizcaya were affected by another player due to their origin: the Basque government. The autonomy achieved during the later stages of the Republic by the Basque region would lead José Antonio Aguirre’s government to make more than a few economic decisions during the conflict.

One of the thorniest consequences for the banking industry of the outbreak of the war and the country’s division into two opposite sides was the inability to carry accurate and reliable accounting records. Already in 1936, after barely six months of conflict, banks were not able to close their accounting books.

“Be less curious about people and more curious about ideas”. This is one of the most famous quotes from renowned scientist Marie Curie. IT was, precisely, her interest in the world that led her to become the first woman to ever win a Nobel prize, at a time when women were rarely allowed to pursue University studies, at least in Poland.

With Spain’s banking industry divided in two, and some of the banks’ CEOs and directors going over to the enemy, it was the professionals at the savings banks and banks who made it possible for everyday life to be as normal as possible within the confines of such a harsh war. To the extent possible, executives and workers came up with ways to get by.

The political climate before the civil war was anything but peaceful. The differences between the buoyant conditions in cities and the complex socio-economic juncture in rural areas were substantial. The policies that the Ministry of Finance adopted, when not directly pointless, were mostly ineffective. All this notwithstanding, the government that emerged from the 1936 elections did not adopt a bellicose stance against the Spanish banking sector.

The political upheaval that marred and engulfed the country’s public life during the first five years of the 1930s, ended leading Spain right towards where some visionaries’ had predicted it irretrievable would: a full-blown civil war.  The succession of controversial events that plagued the first half of 1936 contributed to turn Spanish society into a tinderbox under a stifling political climate. On July 18, General Francisco Franco issued an official statement, announcing the beginning of his uprising against the Second Republic’s current legality.

The new year is a chance to finally fulfil all those resolutions that you did not manage to fulfil the year before. For all of us it is a time to begin from scratch, which is why it is important that we make a good start. For the Spanish this means swallowing down twelve grapes in time with the twelve strokes of midnight, and it is paramount that they are all eaten!  But what about the rest of the world? Every place has its own tradition, but they all coincide that it must be followed in order to get the best out of the coming year.

The end of the colonial conflicts and their consequences opened the door to a new century with various sectors of Spain’s privileged classes showing renewed interest in the creation of new banks. Madrid, Barcelona and Bilbao continued to be the country’s main banking hubs, although the development of the financial industry’s business varied in each region.

He travels incognito in a big wooden box that reveals neither the contents nor the destination. Completely immobilized and protected from any impact, Charles II arrives in Puebla by land and by air. The International Museum of the Baroque in Puebla anxiously awaits the arrival of this King’s portrait – part of the BBVA Collection. It hangs in one of the rooms of the exhibition “The Art of Nations: The Baroque as Global Art”. There nothing disturbs the monarch who probably never dreamt he would one day visit Mexico.

Civil wars, banks that went almost as fast as they came, the brand-new issuing monopoly of the Bank of Spain, unrest in Spanish overseas territories… the later years of the 19th century sure did look challenging for institutions such as Banco de Bilbao. Although the bank had earned a solid footing in its home city, Spain’s situation at that time made it hard to tell how it would fare in the short and medium term.

Painting by Edgar Degas

BBVA Compass added another brush stroke to its big picture commitment to the arts, becoming the lead corporate sponsor of “Degas: A New Vision” at the Museum of Fine Arts Houston.

The exhibition features more than 200 pieces by celebrated Impressionist Edgar Degas, taken from public and private collections from around the world. It is the most significant international survey of the work of Degas in nearly 30 years, and the Museum of Fine Arts Houston is the only U.S. venue to present the exhibition. It opened on Oct. 16.

There was a time when fashion was not decided in Paris, Milan or New York. At one point, it was Philip II’s Spain, an empire where the sun never set, who told the world how to dress. As a reflection of the time, art is the perfect guide to learn about fashion in the 16th and 17th Centuries through the BBVA Collection.

This article is the first of a series that will focus on BBVA’s long history. Over a number of chapters, bbva.com wants to recap some of the highlights of the bank’s almost 160 years of activity, thanks to which it has become one of the most renowned institutions throughout the 19th, 20th and 21st centuries.

The BBVA Bancomer Tower is not just the colossus that welcomes passersby to Paseo de la Reforma – the city’s most prominent avenue, where also the pre-Hispanic and contemporary Mexicos meet – but it is also a prime example of architectural creativity.